Thailand and India aim to boost trade ties

TO boost bilateral trade between Thailand and India, the government hopes to encourage Indian companies to invest in business sectors in special economic zones as India aims to use Thailand as a gateway to the rest of Southeast Asia.

Harsh Vardhan Shringla, the Indian ambassador to Thailand, said that apart from the historical and cultural connection shared by the two countries, trade and tourism were playing key roles. Currently, more than 40 Indian companies actively do business in Thailand while about 30 Thai companies operate in India.

"We would like to encourage Thai entrepreneurs to put more investment in India, which has a vibrant economy with gross domestic product (GDP) growth of 7.5 per cent per annum," he said.

He was speaking at a seminar called "Make in India Roadshow and Business Opportunities in Thailand," which was co-organised by the Foreign Ministry and the Thai embassy in New Delhi in conjunction with the Indian embassy in Bangkok.

Started by Narendra Modi, the prime minister of India, in 2014, the "Make in India" initiative involves a number of key policies such as business environment development, building capacity of manufacturing, innovation, smart cities, economic corridors and industrial infrastructures. The policy aims at opening up foreign direct investment from overseas.

Under the "Make in India" initiatives, Amitabh Kant, secretary at India's Department of Industrial Policy and Promotion, said Modi's administration aims to create 100 million jobs over the next decade and boost manufacturing up to 25 per cent of India's GDP. Meanwhile, 72 per cent of India's population are below 32 years old. Therefore, it will keep getting younger until 2050.

"To attract foreign investors, including those from Thailand, the Indian government must make the business environment easier and simpler, amend business laws and use technology to leapfrog development," Kant said.

More importantly, the Indian government needs to change India's image from "red tape" to "red carpet" to welcome more foreign investors.

Connectivity

Another area that the Indian government is looking for is connectivity between Thailand and India's Northeastern states via Myanmar.

"Thailand is the heart of the Asean region, which offer a vast opportunity for business to grow," he said.

In response to this, Suvit Maesincee, deputy Commerce Minister, said the cost of logistics of land transportation on the highway from Northeastern India to Myanmar and Thailand would be lowered. It will be easier and cheaper to transport more goods and products between the two countries.

In September, the Thai government endorsed major cluster-based sectors including super clusters in nine provinces that involve the high-tech industry, chemical and digital sectors and other potential clusters in two provinces. Investors who want to invest in those areas would receive privileges and tax incentives.

Apart from that, the governments of Thailand and Myanmar have been working on the initial phase of the Dawei special economic zone. This will also present a number of investment opportunities for international investors, he added.

Industry Minister Achaka Sriboonruang said Thailand was ranked number 35 in terms of investment volume in India but India was ranked number 7 for the Thai market. "So, I would also like to see more improvements in terms of Thai investment in India. Currently, top industries from Thailand include chemical, automobile and parts, pharmaceuticals, manufacturing, electronics and appliances," she said.

Two-way trade last year totalled US$8.66 billion, with about $5.62 billion in Thai exports to India and $3.04 billion in Indian exports to Thailand.